U.S. Businesses Politely Applaud China’s Latest Promise To Play Fair

“China’s pledge to separate its innovation and government procurement policies is new and potentially significant,” said USCBC President John Frisbie.

WASHINGTON, January 20, 2011 – Representatives of major U.S. businesses expressed cautious optimism over China’s promise to abandon its government’s plans to buy products only from mainland Chinese companies.

“I also wish to tell you that all companies registered in China are given national treatment,” said President Hu Jintao in a meeting with President Obama and U.S. and Chinese business leaders Wednesday. “In terms of innovation products, accreditation, government procurement, IPR protection, the Chinese government will give them equal treatment.”

Both the US-China Business Council and the US Chamber of Commerce have been lobbying the Obama Administration over the past year to engage the Chinese government over its effort to promote Chinese innovation by only buying products from Chinese companies.  The effort is known as its “indigenous innovation” policy.

The U.S. Chamber of Commerce last July issued an in-depth report on China’s indigenous innovation policy, which it characterized as a complex “web” of industrial policies.

It is clear from the report that there will need to be a lot of follow through to make sure that China fulfills its promise.

On Wednesday in a joint statement with the United States, China pledged: “China will not link its innovation policies to the provision of government procurement preferences.”

Both the executives who have been involved in lobbying the governments over the issue expressed qualified praise for the move Wednesday.

““China’s pledge to separate its innovation and government procurement policies is new and potentially significant,” said USCBC President John Frisbie in a press statement.  “This was one of USCBC’s top advocacy priorities for President Hu’s visit. The use of market-distorting government purchase preferences to foster innovation is counter to international best practices and has tilted the playing field against foreign companies. We look forward to learning more about how this pledge will be implemented.”

And Myron Brilliant, the Chamber’s senior vice president of international affairs, said: “We applaud China’s commitment to delink government procurement from indigenous innovation.  This was a priority for many in the American business community, and we hope China will make concrete changes to its indigenous innovation regime at the central and provincial levels to live up to this positive pledge.

A group of Intellectual Property Breakfast Club panelists will discuss enforcement issues and the environment for tech companies in China in February.

Rep. John Conyers, D-Mich. will deliver a keynote, and China’s intellectual property attache will take part in the panel.

The event takes place Tuesday, February 8th, at Clyde’s of Gallery Place in Washington from 8 a.m. to 10 a.m. Register at: http://ipbreakfast.eventbrite.com.